Under Sec. 84.001, known as the Charitable Immunity and Liability Act of 1987, a non-profit organization is required to carry a $1,000,000 policy for liability to cover the work it does as an organization, and all of its members, and in exchange, no award in excess of $1,000,000 is allowed by law for acts of negligence.
Purpose and Intent of the 1987 Texas Charitable Immunity and Liability Act
In a letter from the Office of the Attorney General of Texas, Ms. Sheela Rai explained the provision in these words:
The Charitable Immunity and Liability Act of 1987 generally grants a volunteer serving as an officer, director, or trustee of a charitable organization immunity from civil liability for acts or omissions resulting in death, damage, or injury done in the course and scope of his or her duties. Civ. Prac. & Rem. Code § 84.004(a); see id. § 84.004(c), .007 (exceptions). A similar immunity is granted to a person serving as a direct service volunteer of a charitable organization, if the volunteer was acting in good faith and in the course and scope of his or her duties. Id. § 84.004(b). The liability of employees and the charitable organization itself is limited to money damages in maximum amounts set out in the statute. Id. §§ 84.005, .006
Sheela Rai
Assistant Attorney General, October 29, 1997
As Church Mutual Insurance put it, “the Texas Charitable Immunity and Liability Act serves to protect volunteers from liability exposure in order to encourage volunteer services through nonprofit organizations. This Act does not shield a nonprofit organization or its employees from liability, but it can significantly reduce their exposure.”
Was this legislation a good idea? Whatever side a person is on, it is clear that the legislature was concerned about encouraging volunteerism and charity in Texas and hence chose to place limits such actor’s lability. The law, set out in 1987, however may need to be revisited in 2024
A Case Study: The Deadly Saint Joseph’s Salmonella Outbreak
According to a news release from the City of Amarillo on March 31, 2022, the City of Amarillo Environmental Health Department and the City of Amarillo Public Health Department opened an investigation into a salmonella outbreak believed to be linked to enchilada meals served at St. Joseph Catholic Church on March 27, 2022.
The outbreak was identified by health officials after their offices received numerous calls of individuals becoming ill after eating the enchilada meals. The City of Amarillo Public Health Department (APHD) release went on to encourage all health care providers treating people who became ill after eating at the event to contact APHD and advised all patrons in possession of food purchased from the church on that day to throw it away as soon as possible and to sanitize the area in which it was kept.
Following the release, the pathogen causing the illnesses was identified as Salmonella serotype I4,12:i:-.
The St. Joseph’s Parish and the Diocese of Amarillo released a statement saying:
We have learned this week that several individuals got sick with food poisoning after eating take-out enchilada dinners sponsored by St. Joseph’s Parish of Amarillo.
We are very concerned about the safety of all of those affected.
St. Joseph’s immediately reached out to the Health Department and the Diocese of Amarillo is working with our insurance carrier. The Health Department is investigating and unfortunately it will be ten days before they will have the analysis on the foodborne pathogen.
We know you are experiencing medical expenses and we intend to set up a procedure where you can bring in your expenses. We hope to be able in a few days to let you know what that procedure will be and where it will be.
ST. JOSEPH’S PARISH AND THE DIOCESE OF AMARILLO
Further testing by the Texas Department of State Health Services showed that more than one food item served at the Enchilada Dinner/Fundraiser was contaminated with Salmonella. Test results for the rice and beans both tested positive for Salmonella serotype I4,12:i:-. Indications are that the contamination may have been due to cross-contamination in the kitchen, where multiple church members were congregated during the preparation and serving of the food, according to multiple photos and media posts related to the fundraiser.
Health officials subsequently identified 140 patrons that became ill with salmonella poisoning following consumption of the enchilada dinners served by SJCC. One patron died.
Real-Life Application of the Texas Charitable Immunity and Liability Act of 1987
Currently, of the 140 identified victims, at least three dozen victims (including the family of the decedent) remain in a lawsuit pending against Saint Joseph’s. The medical bills alone, for these few dozen victims, is believed to equal in excess of $825,000, with the amount paid on their behalf believed to be well in excess of a half-million dollars.
In addition to these amounts, damages include lost wages and pain and suffering. For one family, there is the loss of a loved one.
This begs the questions, “what to do if the damages far exceed the available insurance policy limits?” While $1,000,000 may appear a large number, in situations like this, and being in 2024, this amount quickly evaporates after attorney’s fees, costs of litigation, and medical liens.
To top this off, many policies are burning limits or defense-within-limits policies, which provide that the costs of defense are included within the coverage limit. In other words, the insurance policy goes down by the same amount of attorney’s fees expended to defend the case. While it remains an open question whether or not these attorney’s fees count toward the “cap” under the Texas Charitable Immunity and Liability Act (the “limit” or “cap” on liability), and a significant amount of legal support would argue they do not, such policies further encroach on what might be available to compete victims. In this case, after years in litigation, many thousands of dollars have been spent by Saint Joseph’s.
What Can be Done to Update the Texas Charitable Immunity and Liability Act of 1987?
Considering the fact that the same impetus that drove the legislature to pass the Texas Charitable Immunity and Liability Act of 1987 remains in effect, several suggestions seem viable. First, the legislature could increase the required insurance converge for situations where there are multiple injuries. This is the best option for making the Act viable, and can either be in the form of a requirement for a larger policy or an umbrella policy. A second option could simply provide that in cases in which there are multiple injuries the law could call for a $1,000,000 cap per victim. A third option could be to use the language commonly found in medical malpractice tort reform, in which the “cap” is $1,00,000 in non-economic damages. In other words, the injured parties get their economic loses (like medical costs) and the the limit for pain and suffering or other intangibles is then capped at $1,000,000. Finally, however the legislature seeks to amend the “cap,” the legislature should forbid charity organizations from obtaining burning limits or defense-within-limits policies to avoid any ambiguity as to the limits payable to victims.
Notably, the Saint Joseph litigation is now in its second year, and these victims have not yet been able to put the past behind them and move on.
